Budget cuts and low pay at the Foreign Office are endangering the UK’s global role and could have a “disastrous and costly” effect on the government’s ability to make informed judgments on critical issues, including whether to go to war, according to a parliamentary report.

Protect FCO’s Budget or Reduce Britain’s Global Diplomacy, from the cross-party House of Commons foreign affairs committee, depicts a department under severe and increasing strain.

“The cuts imposed on the FCO since 2010 have been severe and have gone beyond just trimming fat: capacity now appears to be being damaged,” it says. “If further cuts are imposed, the UK’s diplomatic imprint and influence would probably reduce, and the government would need to roll back some of its foreign policy objectives.”

The parliamentary committee said British diplomats were underpaid compared with other government departments, but that disparity had traditionally been balanced by other benefits and the attractions of travel. Those perks had since been eroded, jeopardising the FCO’s ability to attract “the best and the brightest”.

The report said the department was “struggling to fill positions in critical business areas” and “many have argued that expertise within the FCO has suffered.”

Sir Richard Ottaway, the Tory MP who chairs the committee, said: “The FCO’s budget is a tiny element of government expenditure but it makes a disproportionate contribution to policymaking at the highest level, including decisions on whether the UK should go to war.

“Impairing the FCO’s analytical capacity for the sake of a few million pounds could be disastrous and costly. The next government should protect FCO budgets from any further cuts.”

The FCO had fallen short of its own diversity targets and the committee found that its performance on promoting women to top posts had been “disappointing”. The report noted that, in the entire history of the FCO, no woman had been ever been promoted to the highest grade, which applies to a small handful of posts, such as ambassadors to Washington and Paris, and the position of permanent secretary.

In response the FCO said that it had saved the taxpayer £100m the past year, but can still made new investments to “ ensure we can protect the UK’s national interest and maintain Britain’s role on the global stage.”

An FCO spokesman said: “Since 2010 we have opened nine new diplomatic missions in emerging countries and in the fastest growing economies to ensure we have diplomats everywhere where we need to have influence.

“The current government has reopened the language school which was closed down in 2007, and built a diplomatic academy so we can equip our diplomats with the skills they need to promote Britain’s foreign policies around the world.”

On promoting women into top jobs, the spokesman said: “We know there is more to do but we are making progress. Over 40% of the FCO management board are women and we have 34 female heads of mission, including our first female ambassador to China.”